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Production Costs Are Declining

Costs per kilowatt-hour for li-ion are declining. Tesla aims to improve this with its massive gigafactory and other automakers are working away as well.

Other components such as motors and controllers and other electrified vehicle specific parts, while still costly, are also coming down.

The watchword is “economies of scale.” While hybrids and plug-ins are a relative minority, costs do work against them making the value of cheaper and more efficient electricity less clear cut for some. But as more are sold, production costs will improve which can be passed to the consumer.

Competitiveness among makers bringing new vehicles to market will eventually improve the cost equation as well. Admittedly, some electrified vehicles are pretty bloated, but as they say, this is not a sprint, but a marathon – and others like a leased Leaf, say those who’ve taken the plunge, do make fantastic sense now.